Anchorage mayor: Shift tax burden from property toward gas
Anchorage Mayor Ethan Berkowitz wants to broaden the municipality's revenue base, through a partial transfer from property to gasoline taxes.
In his budget proposal, Berkowitz increases the gasoline tax but decreases property taxes. He says the state’s fiscal problems have put more pressure on cities to keep up their stable financial footing.
So far, Berkowitz said, Anchorage has been able to maintain its AAA bond rating -- but if voters want it to stay that way, he says the municipality needs to diversify its revenue stream.
“We have too much of a concentration and too much of a reliance on property tax, and that puts our stability in jeopardy," Berkowitz said. "And our stability is particularly critical as (regards) the state, which is a very unstable place right now in terms of its fiscal situation. So we want to make sure we can provide balance moving ahead.”
Anchorage has the highest property taxes in the state, and a few months ago the Assembly voted to raise them another 5 percent. The mayor says the municipality is putting too much reliance on homeowners’ shoulders, with more than half of the local budget coming from property taxes.
The municipality’s Budget Advisory Commission, which is made up of members from Berkowitz and previous mayor Dan Sullivan’s administrations, came up with the plan. They recommended a 10-cent-per-gallon tax.
In return, Berkowitz says, he will lower property taxes -- saving homeowners about $360 a year on a $350,000 home. Here at KTVA, we did some math using numbers from the U.S. Department of Transportation to learn how much more the average driver would pay in gas taxes.
According to those figures, if you drive the average number of miles per year (13,476) and have a car that gets the average miles to the gallon (24) and gas was $2.85 a gallon, then you would pay an extra $56 a year. That means an owner of a $350,000 Anchorage home, like the one Berkowitz mentioned, stands to get back about $304 a year under Berkowitz’s plan, or $248 with two drivers in the family.
The people who stand to lose under this plan are those who don’t own homes in Anchorage, and anyone who lives outside Anchorage but fills up in the municipality.
“It’s just a way of adjusting who pays, and with the gasoline tax you’re going to get people who don’t live in Anchorage and use our facilities," Berkowitz said. "There’s 37,000 commuters that come into Anchorage every day -- they don’t pay anything for our roads or police or fire, and this is a way to make the tax burden a little more fair.”
Right now, Alaska has the lowest state gas tax in the country, at about 12 cents per gallon. Gov. Bill Walker has been calling for higher gas taxes for several years, but so far, lawmakers haven’t listened. Walker wants to raise the gas tax by 8 cents a gallon over two years, for a total 16-cent increase.
If both proposed gas taxes go through, drivers in Anchorage could be paying a total of 38 cents per gallon -- the same amount as California's gas tax, the nation's seventh-highest.
The state with the highest tax on gas is Pennsylvania, which pays 58 cents per gallon.